Fraud Led To 286 Indy Foreclosures, Authorities Say

INDIANAPOLIS -- Six men caused nearly 300 Indianapolis foreclosures by buying homes and not paying the mortgages and by fraudulently selling other homes at inflated prices, according to charges announced by authorities Wednesday.

The men also are accused of fraudulently obtaining $283,000 in federal rent assistance money for tenants at homes that didn't meet federal quality standards, 6News' Rafael Sanchez reported.

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Slideshow: Six Men Charged

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The foreclosures have hurt certain neighborhoods on the city's east and west sides, bringing down the value of neighboring properties. Also, many of the foreclosed properties have been abandoned, attracting criminal activity, authorities said.

"The cartel's criminal actions have devastated block after block of many formerly vibrant neighborhoods," said Rufus "Bud" Myers, executive director of the Indianapolis Housing Agency, which announced the charges.

The six -- Brian Beach, 36, Greenwood; Omar Dillard, 35, Fishers; Preston Forte III, 39, Chicago; Patrick Ladarius, 39, Fishers; Mehran Valiyi, 43, Indianapolis; and Marcus Ward, 41, Carmel -- have been charged with welfare fraud and theft.

Some of the six may have worked together, authorities said. Arrest warrants have been issued for Ladarius and Forte; the others already have been arrested but aren't necessarily still being held, authorities said.

Authorities said the men took out almost $38 million in mortgages under fake companies they created, buying and then reselling 568 homes across the city. They never paid the mortgages on the homes they bought, sending some of the properties into foreclosure, according to investigators.

"Then they file for bankruptcy to keep from having to pay the judgment on the foreclosure, and its just a never-ending circle," said Barbara Crawford of the Marion County prosecutor's office.

They sold some properties after misrepresenting the homes' value to potential investors. Investors would borrow money from banks and then buy the homes at the inflated prices, authorities said.

Some investors then found themselves either unable to keep up with their mortgage payments or unable to sell the homes at anything near the prices they paid.

The actions of the six men resulted in 286 foreclosures over the last five years, authorities said.

The charges are the result of investigations involving the housing agency, Indianapolis police, the Marion County prosecutor's office and other agencies.